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2005 DIGILAW 811 (RAJ)

Alora Arc Steels Pvt. Ltd. v. State of Rajasthan

2005-03-15

DINESH MAHESHWARI

body2005
Judgment Rajesh Balia and Dinesh Maheshwari, JJ.-Heard learned Counsel for the parties. 2. At the request of learned Counsel for the parties, the preparation of paper book for the present appeal is dispensed with. 3. The fact giving rise to this appeal are that the appellant-company, which is a Private Limited Company, applied to the District Level Screening Committee for its eligibility certificate for availing exemption form payment of tax under the Rajasthan Sales Tax Incentive Scheme, 1987 which was then in force. 4. By order dated 10.09.1994 the D.L.S.C. allowed the application of the petitioner and computed the fixed capital investment on which the exemption limit was to be computed on Rs. 40.59 lacs by treating it to be a new industry set at eligible area falling in the category of small scale industries. The quantum of exemption was determined as 100% of the Fixed Capital Investment (FCI). At the time when the order was passed, no power of review vested in the appropriate Screening Committee but any party could file an appeal before the Tribunal against the order of DLSC or SLSC, as the case may be, within the period prescribed under the then existing para 7-A of the Rajasthan Sales Tax Incentive Scheme, 1987. 5. By notification dated 110.1994 a new para 7-A was inserted in the scheme of 1987 conferring a power of reviewing its own order in the appropriate Screening Level Committee as the case may be, and existing para 7-A providing for appeal was renumbered as 7-AA. Thus, w.e.f. 110.1994, the provision for review to reconsider its own order on an application made by the Industrial unit or Commissioner or any officer authorised on this behalf or Assessing Authority, was conferred on the appropriate Screening Committee provided such application was made before the expiry of the period prescribed for preferring the appeal. The power was not conferred retrospectively. 6. The aggrieved party could apply to the Screening Committee for reconsideration or revision of the order passed by the Committee within the prescribed period. As a consequence thereof , under the provision of appeal para 7-AA the aggrieved party was enabled to file an appeal after availing the remedy of review or reconsideration under para 7-A and the period of limitation for appeal were to be counted from the date of order passed on review and reconsideration, if any. 7. As a consequence thereof , under the provision of appeal para 7-AA the aggrieved party was enabled to file an appeal after availing the remedy of review or reconsideration under para 7-A and the period of limitation for appeal were to be counted from the date of order passed on review and reconsideration, if any. 7. Whether the procedure prescribed under Rule 7-A, assuming that para 7-A applied to the case of the appellant as period for filing appeal under existing provisions has not expired and the additional remedy against the order passed by the DLSC/SLSC came into existence within that period, the review could have been filed by the Commissioner or the Industrial unit as the case may be within 180 days either from 10.09.1994 or at best from 110.1994. 8. Para 7-A not only provided for the period of limitation for referring an application for review and reconsideration, it also provided that a period within which appropriate Screening Committee was to dispose of such application. It was envisaged that appropriate Committee shall dispose of the application to reconsider its decision within a period of 90 days from the receipt thereof . Para 7-A itself did not contain any power authorising the appropriate Screening Committee to review or reconsider its own order suo moto. 9. Be that as it may, the petitioner started availing the benefit of exemption scheme on the basis of said eligibility certificate and in fact availed the entire amount of eligible exemption quantified vide order dated 10.09.1994 upto year 1998. 10. An application was moved by the Commissioner on 04.02.1997, on the basis of some audit objection, before the appropriate Screening Committee to review the maximum determination of limit of eligibility amount in the case of the petitioner. The notice of the application was issued to the petitioner on 30th May, 1997. Another notice dated 24.07.1997 was issued to the petitioner which was replied by the petitioner on 24.09.1997. On 112.1999, a third notice was issued to the appellant-company which was also replied by the appellant-company on 14.01.2000. The final order was passed by the DLSC on 22.06.2000 reducing the amount of FCI to Rs. 32 lacs only and confining the exemption available to an expansion unit and only the limit of eligible quantum of exemption was reduced to Rs. 28.80 lacs only. The said order is Annexure 19 with the writ petition. 11. The final order was passed by the DLSC on 22.06.2000 reducing the amount of FCI to Rs. 32 lacs only and confining the exemption available to an expansion unit and only the limit of eligible quantum of exemption was reduced to Rs. 28.80 lacs only. The said order is Annexure 19 with the writ petition. 11. The petitioner filed the writ petition challenging the order Annexure 19 on 12.09.2003 making a statement that he came to know about the order only when the show-cause notice was issued to him by the Assessing Authority for reopening his assessment of the previous years by recalling the exemption allowed to him on the basis of eligibility certificate issued to him on 10.09.1994, by restricting the maximum quantum of exemption as per the order dated 22.06.2000. It is on the receipt of the said notice, the said writ petition was filed and show-cause notice was issued on 110.2003. 10.12. It appears that soon after notices were issued, the assessment orders were passed recalling exemption granted to the appellant-company in excess of 28.8 lacs. That led to filing an application for amending the writ petition by challenging the assessment orders also which as a consequence of the order passed by the DLSC referred to above. The said application for amending the writ petition was allowed by the Court on 20.11.2003. Alongwith that application, the petitioner moved an application for staying the recovery of the demand created under the re-assessment orders. 113. The said application for staying the demand has been rejected by the learned Single Judge by order under appeal dated 24.02.2004 inter alia on the ground that since the petitioner has alternative remedy of filing an appeal in such case the Court can appropriately refuse to exercise its discretion in not entertaining the writ petition, however, while rejecting the application for grant of stay on the ground of availability of alternative remedy, the writ petition itself was not decided or disposed of or dismissed on the ground of availability of alternative remedy and it was kept for consideration on merit. 14. The order of rejecting the interim application for granting of stay order solely on the ground of alternative remedy while not dismissing the petition itself appears to be contradictory in terms. 14. The order of rejecting the interim application for granting of stay order solely on the ground of alternative remedy while not dismissing the petition itself appears to be contradictory in terms. If the availability of alternative remedy was the ground for not exercising the discretion in favour of the appellant for exercise of extraordinary jurisdiction then having heard both the parties, the principle ought to have been exercised to dismiss the writ petition but keeping the writ petition pending for further consideration on merit notwithstanding the Court was of the view that alternative remedy bars the remedy extraordinary jurisdiction and dismissing the stay petition only. 15. Be that as it may, large number of cases have been referred to by the learned Single Judge. The principal contention which the petitioner has taken in his ground of attack and though which has not been specifically noticed by the learned Single Judge but has been referred to generally while challenging the validity of the order of the DLSC goes to show that the petitioner has challenged the order of the DLSC on the ground of want of inherent lack of jurisdiction of review to entertain and decide the application. In view of the clear provisions of para 7-A under which such power could be exercised only on an application which has been moved within the period stipulated under the said paragraph and not beyond it, apart from the power of review being a creature of statute and falls in the realm of right to avail a remedy by aggrieved party, such right vests on the date the proceedings are instituted or the order to be reviewed is passed, no such application was at all moved within said period which could have been entertained by the DLSC in 1998. 16. Secondly, it has also been brought to the notice that the impugned order of the DLSC is non-speaking order which is in breach of principles of natural justice. The petitioner has never contained that he was not given the notice before passing the order or he was not given opportunity of hearing inasmuch as the petitioner himself has produced all the notices received by him and replies submitted by him. 17. The petitioner has never contained that he was not given the notice before passing the order or he was not given opportunity of hearing inasmuch as the petitioner himself has produced all the notices received by him and replies submitted by him. 17. The learned Single Judge has laid emphasis that there is no dispute on the point that first appeal lies against the order of assessment under Section 84 of the Rajasthan Sales Tax Act before the Deputy Commissioner (Appeals) and the second appeal lies to the Rajasthan Tax Board. 18. The learned Single Judge, however, committed error in not noticing that in the present case the issue is not about an error in assessment made by the Assessing Officer in exercise of its own adjudicatory discretion. The assessment order which has been subjected to challenge by way of amendment, is an order passed as a consequence of order passed by the DLSC modifying its earlier order passed on 10.09.1994 vide its impugned order dated 22.06.2000 on an application moved by the appellant on 04.02.1997. The determination of limit of exemption lies within the domain of DLSC and it is not for the Assessing Officer to make a variation therein. Therefore, if the DLSC had reduced the eligible amount for exemption form 40.59 lacs to 28.80 lacs until that order stands, recovery of demand in respect of exemption availed by the petitioner in excess of 28.80 lacs cannot be adjudicated differently by any Assessing Authority or Appellate Authority, Number of appeals are provided under the Act against the assessment order is of little relevance in the present circumstances. 19. So far as the order of DLSC is concerned, it has been challenged inter alia on the ground of lack of inherent jurisdiction to entertain the application and that its order is in breach of principle of natural justice inasmuch as it does not disclose any reasons for its conclusion. In the event of challenge to any order on such grounds, the existence of alternative remedy cannot be a ground for rejecting the petition. The principle is well settled by the Constitution Bench of Supreme Court in A.V. Venkateswaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani & Anr., AIR 1961 SC 1506 . In the event of challenge to any order on such grounds, the existence of alternative remedy cannot be a ground for rejecting the petition. The principle is well settled by the Constitution Bench of Supreme Court in A.V. Venkateswaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani & Anr., AIR 1961 SC 1506 . The Court first made it clear that the principle that party who applies for the issue of a prerogative writ should, before he approaches the Court, have exhausted other remedies open to him under the law does not bar the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a Rule which Courts have laid down for the exercise of their discretion. 20. Further, the Court clearly carved out two clear exceptions to general principle against entertaining petitions in exercise of its extra-ordinary jurisdiction when alternative remedy is available, apart from lying the general rule to deal with cases relating to the existence of alternative remedy, in which the High Court will or will not exercise its discretion to entertain the petition in spite of availability of an alternative remedy. In that regard the Honble Supreme Court has made the following observations:- " The vide proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Article 226 of the Constitution unless (1) there was a complete lack of jurisdiction in the officer or authority to take the action impugned, or (2) where the order prejudicial to the writ petitioner has been passed in violation of the principles of natural justice and could, therefore, be treated as void or nonest and that in all other cases, Courts should not entertain petitions under Article 226, or in any event not grant any relief to such petitioners cannot be accepted. The two exceptions to the normal rule as to the effect of the existence of an adequate alternative remedy are by no means exhaustive, and even beyond them a discretion vests in the High Court to entertain the petition and grant the petitioner relief notwithstanding the existence of an alternative remedy. 21. The learned Single Judge has misinterpreted this basic principle while not noticing the fact that the petitioner has challenged the order of the DLSC on the ground of complete lack of jurisdiction. 21. The learned Single Judge has misinterpreted this basic principle while not noticing the fact that the petitioner has challenged the order of the DLSC on the ground of complete lack of jurisdiction. An application having been made to the DLSC by the Commissioner beyond limitation which could not have entertained by it at all and secondly, the order not disclosing the reason is an order in breach of principles of natural justice. Therefore, in our opinion, the rejection of the petitioners application for grant of interim injunction while the writ petition was kept pended for consideration was not proper and ignoring of these two aspects while challenge to order of DLSC on these grounds is kept alive it cannot be said to be on germane consideration and cannot be sustained. 22. A bare perusal of para 7-A and perusal of the impugned order Annexure 19 makes a strong prima facie case in favour of the appellant to support the aforesaid two pleas and, therefore, in our opinion, in the facts and circumstances prima facie the DLSC had no jurisdiction to entertain the application of the Commissioner. The entire amount of the exemption limit originally sanctioned in favour of the petitioner having been availed by the petitioner, during the continuance of a validity issued eligibility certificate, the Assessing Officer having no option but to recall the order of allowing the petitioner to avail the exemption upto exemption limit sanctioned by the DLSC in view of its modified order, the alternative remedy against the order passed by the Assessing Officer was of little consequence for the purpose of considering the application for interim relief in this case. 23. The reference to the power of the State Government to suo moto revise the orders of appropriate Screening Committee was also wholly irrelevant, that firstly that cannot make the order of DLSC an order within jurisdiction, secondly such power has not been exercised by the Sate Government nor considered by the State Government even after 10 years of its making of the order and after full knowledge thereof . No disputed questions of facts relevant for the purpose of exercise of detaining the Judgment of DLSC are involved in the petition, at all which could be taken into consideration. No disputed questions of facts relevant for the purpose of exercise of detaining the Judgment of DLSC are involved in the petition, at all which could be taken into consideration. Undoubtedly, in the present facts and circumstances of the case, the other consideration which ought to have come before considering the relief of interim relief namely; the question of irreparable injury and balance of convenience also favours the petitioner. Therefore, the petitioner is entitled to interim relief until the pendency of the petition. 4.24. Accordingly, the appeal is allowed. The Judgment under appeal is set aside. The appellant-petitioners application for stay of recovery of demand raised by the Assessing Officer in pursuance of order impugned passed by the DLSC is stayed until decision of the writ petition.